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NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice V. Balakrishna Eradi, President;
Mrs. A.S. Vijayakar, Dr. A.K. Ghosh, Mr. Y. Krishan & Dr. Rais Ahmed, Members
CONSUMER UNITY AND SOCIETY, CALCUTTA—Complainant
versus
BANK OF BARODA—Opposite Party
Original Petition No. 2 of 1988—Decided on 18.5.1989
Headnote:(i) Consumer Protection Act, 1986 - Section 14(1)(d) - Deficiency in Service - Banking service - Illegal strike - Suspension of banking operations of the respondent bank from 7th September 1987 to 30th October, 1987 - Striking employees were demonstrating in front of, the entrance to the various Branch Offices of the Bank and were effectively preventing the entry of officers and willing workers into the premises of the Bank - Inability of the Bank to conduct banking operations due to reasons wholly beyond its control- There is nothing on record to establish any negligence on the part of the Bank - A case failing within the well known exception of force majeure - Claim made by account holders for award of compensation on the ground that they were put to inconvenience cannot be maintained - However, considering the fact that strikes in public utilities services have become a very common and frequent phenomenon there is an urgent and imperative need to evolve a workable, scheme which would enable uninterrupted service being rendered to constituents of every bank throughout the year.
Held: We should not however be understood as laying down any principle of general application that in no case of strike by employees can a Bank be made liable for payment of compensation. In any given case if it is shown that the strike was not illegal and it had been occasioned by any negligence on the part of the Bank, in performance of its administrative functions of good governance and maintenance of proper employer employee relations different considerations may possible apply. We are not called upon to express any opinion on this point in this case.
(para 9)
We are constrained to observe that it is a matter for regret that in the lengthy written submissions made on behalf of the Indian Banks/Association, one searches in vain for any indication of a proper appredation of Lie great inconvenience that is bound to have been caused to the large number of constituents of the Bank effected by a strike. Instead what we find is a plea couched in highly technical and legalistic language that the "respondent Bank has no absolute obligation" to render uninterrupted banking service either under any law or agreement...." (para 10)
The Banking Industry is the life breath of our nations economy not merely in respect of the industrial and agrarian sectors but also the urban as well as rural, commercial and domestic sectors. The sudden cessation of its operations by a Bank for howsoever short a period is bound to produce serious adverse repercussions to its constituents belonging to all the 2foresaid categories entailing very great hardship and loss. Since strikes in public utility services have unfortunately become a very common and frequent phenomenon in our country there is urgent and imperative need to evolve a workable scheme which would enable uninterrupted service being rendered to constituent. of every bank throughout the year during normal business hours on ail working days notwithstanding a strike by the employees of the Banks. Barring a few Banking Companies which are in the private sector the rest of the Banking Industry in the country is operated by nationalised banks. It is clearly the duty of Government of India to ensure that the consents of these Banks are provided uninterrupted service and that they are not put to inconvenience. hardship and loss by reason of any stoppage of work by the employees of any of the nationalised banks. (Para 11)
(ii) Consumer Protection Act 1986- Sections 2 & 14 - Banking Regulation Act, 1949 -Section 36 AD and 36B - Illegal strike - Suspension of banking operations as the striking employees were effectively preventing the entry - It is the obligation of the law and order authorities to enforce the provisions of section 36B of the Act.
Held: We expect that the Government of India and the State Governments will immediately bestow their anxious attention on this vital aspect for safeguarding interests of the consumers namely, the large number of depositors and account holders in the banks in the country during the period of a strike. Any service in connection with or in relation to bank is included as an "essential service" under section 2(xxi) of the Essential Services Maintenance Act, 1981 and under section 3 of the said Act, the Government has the power to prohibit a strike by issuing a notification. When a banking company is affected by a strike and the demonstration carried on by the employees is such as would constitute an offence under section 36AD of the Banking Regulation Act, it is mandatory that the concerned State Government should afford adequate police protection to the Bank so as to enable banking operations to be carried on in every branch of the Bank by facilitating the free entry into and egress from the promises of the bank by the consumers and by employees who are willing to work. Since strikes in public utility services have become quite frequent the consumers of the Banking Industry are entitled to expect that the Government and the Reserve Bill1k of India will take due note of the existing realities and make effective and adequate alternative arrangements for rendering at least a limited amount of service to the customers of any nationalised bank which is affected by a strike so that the hardship and loss suffered by the consumers may to that extent be minimised. Similar action has also to be taken by the Reserve Bank of India for safeguarding the - interests of account holders in the Banks which are in the private sector. In this modem age of computerisation, there should not be any insurmountable difficulty to evolve a workable solution and what is needed is only the requisite will, initiative and enterprise and a determination to maintain at least a skeleton service so that the consumers having accounts in the Banks and more particularly small account holders and depositors like pensioners etc. will not be made to suffer avoidable hardship. (para 12)
(Hi) Banking Service - Whenever a strike notice is served by any section of employees or their Union on the management of a bank and a strike appears t9 be imminent, the concerned Bank should insert a publication in the leading local newspapers informing the customers about the possibility of there being a strike in the Bank. (Para 16)
Result: Complaint dismissed.
IMPORTANT POINTS
A Banking Company which is forced to suspend its business operations for a period of time on account of an illegal strike resorted to by its employees, and demonstrations involving obstruction of entry into and exit from its offices, is not liable to pay compensation to the account holders on the ground that they were put to inconvenience and loss by reason of the suspension of business of the Bank during the period of the strike.
2. Banks are directed to extensively publish in the newspapers the fact of any impending strike in case a notice has been served on a bank by its employees or their Union that they would resort to a strike from some future date.
Mr. Justice Balakrishna Eradi., President— This petition raises a very important question which is of vital concern to the Banking Industry in this country as well as to many lakhs of consumers who have accounts and dealings with the various Banks. Stated briefly, the question that arises for our decision is “whether a Banking Company which is forced to suspend its business operations for a period of time on account of an illegal strike resorted to by its employees, demonstrations involving obstruction of entry into and exit from its offices is liable to pay compensation to the account holders on the ground that they were put to inconvenience and loss by reason of the suspension of business of the Bank during the period of the strike.”
2. The complainant before us is a well-known Voluntary Organisation—the Consumer Unity and Trust Society registered under Rajasthan Society Registration Act which has its registered office at Jaipur and Branches in various parts of the country including one at Calcutta. The respondent before us is the Bank of Baroda, hereinafter referred to as the “Bank”. All the Branches of the Bank in the State of West Bengal were unable to transact any business from 7th September, 1987 to 30th October, 1987 due to a strike by its “award staff employees” as a protest against transfers of Bank employees who had been in one branch for 20 years or more to other branches within the city of Calcutta in accordance with the agreed scheme of job rotation/transfer. We are not concerned with the merits of the dispute between the management and the employees of the Bank but it is necessary to state that the strike was launched by the employees of the Bank when conciliation proceedings were pending before the Deputy Labour Commissioner and hence it was clearly illegal in view of the specific provision contained in Section 22(1)(d) of the Industrial Disputes Act, the Banking Industry having been declared to be a ‘public utility service’ under subclause (vi) of clause(n) of Section 2 of the said Act. The record before us shows that the striking employees were demonstrating in front of the entrance to the various Branch Offices of the Bank and were effectively preventing the entry of officers and willing workers into the premises of the respective Branches. Hence the situation was such that it was impossible for the Bank to carry on its banking operations from any of the Branches in the State during the period of the strike.
3. The complainant society has put forward a claim for recovery of a sum of Rs. 110 crores “for and on behalf of the customers of the Bank to be distributed prorata on the grounds inter alia—
(a) Interest on Over drafts accounts to be reimbursed at lending rate during the period the account was not operative.
(b) Reimbursement of interest at the lending rate less actual rate of interest creditable to the saving deposit account holders.
(c) Interest at the lending rate on the negotiable instruments held in suspense during this period to be reimbursed to the customers.
(d) Reimbursement of interest at which the customers may have borrowed money from elsewhere to meet with their exigencies for the period during which they could not lay hands on Uieir own money lying stuck in or due to the Bank.
(e) Reimbursement of wharfage, demurrage and such other costs on consignments, documents of which were lying in the Bank or could not be delivered to the Bank during this period and the related period before and after this strike.
(f) Such consequential damages and losses incurred by the customers resultant of the strike, including compensation for mental and physical anguish and agony caused due to non availability of the money or against a limit/loan or over-draft facility with the Bank.
(g) Such other losses and claims, which may arise out of the actual claims to be lodged by the customers and/or assessed for the strike period after making “thorough assessment through an independent agency.”
4. Surprisingly no p
